Asian Development Bank will provide a loan of $500 million, or approximately Rs 4,255 crore, to support green and sustainable infrastructure projects in India, according to a release issued by the Ministry of Finance on Monday.
The multilateral lender signed a deal with the government last week. The loan, with a sovereign guarantee, will be extended to the India Infrastructure Finance Co., finance ministry said.
“ADB financing will help IIFCL provide long-term capital for infrastructure projects focusing on connectivity and energy transition as well as under-resourced sectors like urban projects, education, and healthcare,” said Mio Oka, ADB country director.
The project will build the institutional capacity of IIFCL to integrate green and sustainable practices into the infrastructure projects. A sustainability unit and an environmental sustainability framework and scoring method to assess the sustainability rating of the projects will also be established, the ministry said.
The exact projects due for the funding or likely locations have not been disclosed.
To achieve its net-zero goals, India requires substantial private capital investment, which can be unlocked through innovative financing platforms and risk-mitigation tools to address sectoral risks and market imbalances.
ADB has worked closely with IIFCL over the years to develop its operational and risk management capacities. As IIFCL has developed and evolved, its operations are increasingly geared toward leveraging private sector resources that necessitate the expansion of its product offerings for potential institutional investors, the statement said.
To date, ADB has committed 623 public sector loans, grants, and technical assistance totaling $55.3 billion to India. The Manila-based lender's current sovereign portfolio in India includes 67 loans worth $14.15 billion.
Last month, Tata Power Co. signed a memorandum of understanding with Asian Development Bank to finance clean energy initiatives worth $4.25 billion.
The collaboration will fund strategic projects, including a 966-megawatt solar-wind hybrid power project, a pumped hydro storage system, and advancements in battery storage and distribution networks.
The initiatives aim to bolster India's renewable energy infrastructure and decarbonisation efforts, the filing added.
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